A3 Artists Agency on Friday said it will shut down its operations starting on Monday, with its employees receiving their final paychecks that day.
"This decision was not made lightly and comes after extensive analysis," wrote A3's Chief Operating Officer Todd Quinn in a note to staff on Friday afternoon. "Despite our best efforts, we find ourselves unable to continue operating in a sustainable manner."
The agency's shutdown comes about a month after A3's digital and alternative content departments were sold to rival Gersh. After that deal, about 100 employees remained at A3.
Adam Bold, A3's chairman, said in an interview that it was last summer's dual Hollywood strikes "that broke us financially." The strikes led by the Writers Guild of America and actors guild SAG-AFTRA caused studios to delay or shuffle their film slates and many productions were suspended. That in turn affected talent agencies and management firms, which collect revenue based on their clients' work.
"When it became apparent that without intervention that the company would become insolvent, I explored selling some of the assets in order to create capital to make the rest of the company sustainable and viable," Bold said.
But he said the value of the Gersh deal significantly declined after his partners Brian Cho and Robert Attermann sought to change the terms of an agreement and later filed a lawsuit attempting to block the transaction. An attorney representing Cho and Attermann did not immediately respond to a request for comment.
Cho and Attermann in their lawsuit said that Bold sexually harassed employees and irresponsibly spent the agency’s funds. Additionally, Cho and Attermann alleged that they were misled and pressured into amending an agreement that would give Bold the ability to negotiate the sale of A3 without their involvement.
Bold denied the allegations, saying he did not sexually harass employees and that the negotiations for amending agreements were overseen by attorneys on both sides. He also said that some of the spending occurred prior to knowing that the COVID-19 pandemic and dual Hollywood strikes would cause work stoppages that would hurt the industry.
Bold said that after the lawsuit, "it became impossible for the company to function."
He said the remaining agents couldn’t drum up new business because clients were concerned about the potential #MeToo issues. Meanwhile, other agents at A3 got new jobs.
A3 Artists Agency has a storied history. Founded in 1977, it was formerly known as Abrams Artists Agency and was purchased by an ownership group that included Bold, Cho and Attermann in 2018. The firm rebranded as A3 Artists Agency in 2020.
This story originally appeared in Los Angeles Times.